Money Management

If you’re earning credit card rewards, make sure you don’t hoard them. Find out why you may want to redeem rewards as soon as you can. 

Rewards credit cards offer a fantastic way to earn rewards when you make purchases with your cards. But it’s a good idea to use your rewards, rather than hoarding them. For many credit card rewards enthusiasts, knowing when to make a redemption can be tricky — especially if there are several flexible redemption options that sound great. It’s best not to overthink it. Using your rewards sooner rather than later can allow you to get the most from them.

1. Rewards programs can change

It’s not uncommon for credit card rewards programs to change over time. Credit card issuers may decide to make minor program changes or alter the entire structure of a reward program. When this happens, it can be frustrating for those who still have rewards because they may have to devise a new redemption strategy with the new program changes in mind.

Let’s imagine your credit card rewards program allows you to transfer your rewards to several travel partners for hotel stays and flights. There may come a time when one of the listed partners is no longer part of the rewards program, which could mean you need to change your redemption plans. As you earn rewards, don’t assume that program changes won’t occur.

2. Your rewards may become less valuable

Another reason to use your rewards sooner rather than later is the risk of devaluation. Have you noticed how some restaurant and retail loyalty rewards programs become less valuable with time? A free Chiptole burrito that cost 1,250 points in 2019 now costs 1,625 points in 2023. Credit card rewards are similar. When you let your rewards sit unused, there is a risk that they will become less valuable due to program changes, and those changes may cost you.

For example, let’s imagine you have a travel rewards credit card and decide to use your rewards to book an award flight. An award flight that costs 40,000 miles today may cost 50,000 miles in a few months or a couple of years. To maximize the value of your rewards, it’s in your best interest to use your points, miles, or cash back as soon as possible.

3. Your unused rewards may cost you money in fees

It’s possible to find a rewards credit card with no annual fee. However, some of the best rewards credit cards have pricey annual fees in exchange for the benefits offered. Don’t forget to consider the price you’re paying to use a rewards card.

If you’re paying a yearly fee to use your card, you’ll continue to pay that fee every year while it remains in your wallet. When you let your rewards sit unused, they become less valuable each year — yet you’ll continue to be charged a fee to use your card. All the money spent on annual fees adds up, impacting your personal finances.

Don’t wait for the perfect credit card rewards redemption

If you have a collection of rewards you’re stashing for the perfect redemption, do this instead:

Research your redemption options thoroughly to understand your options.Redeem your rewards soon to maximize their value.

Using credit cards responsibly can teach you how to manage your money better and may help you improve your credit score. You can also use credit cards to earn rewards. If you’re not yet earning rewards on your everyday spending, check out our list of the best rewards credit cards.

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Aldi is a discount grocery store beloved by many for its low prices and unique selection. Here are some Aldi items Reddit users can’t get enough of. 

Keeping grocery costs down can leave you more money in your checking account. With food prices expected to increase 6.5% throughout 2023 at a time when costs are already high due to surging inflation, it’s important to find every possible way to do that.

There are a number of techniques that can help you keep prices down as you cope with rising grocery costs. You can use a grocery credit card offering bonus cash back for grocery purchases, for example. You can also make meal plans based on what’s on sale and bulk buy certain staples to get better prices, such as value packs of meat. Switching to more plant-based meals can also help, as costs are typically lower — and there are health benefits to this approach as well.

You can also try out shopping at Aldi. Aldi is a discount grocery store chain known for offering low prices, so you don’t have to give your credit cards too much of a workout when you go shopping there (although you have to bring your own bags, so be aware if you’re an Aldi newbie).

Aldi not only provides great bargains, but it also offers unique and varied products — many of which have a wide fan base. In fact, there are certain Aldi items that Reddit users simply can’t get enough of. Here’s what they are.

1. Chicken and Bone Broth

Aldi’s Chicken and Bone Broth are big crowd favorites, with many Reddit users chiming in to specify just how good — and affordable — these items are.

“I use it for everything and it’s half the price of bone broth anywhere else,” one Redditor said. Another user commented that they appreciate that these broths have lower sodium than many competitor products, which really came in handy when their mother had heart surgery and had to limit her sodium intake.

2. Tropical Fruit Greek Yogurt

Aldi’s Tropical Fruit Greek Yogurt is another sumptuous treat that could be perfect for these warm summer months. Numerous Reddit users mentioned how good both the taste and prices were for this Aldi product. “Tropical Fruit Greek Yogurt. $0.55 per container is such a deal,” another Redditor commented.

3. Moser Roth chocolate bars

Moser Roth chocolate bars are beloved by numerous Aldi forum commentators on Reddit, with one describing them as “top notch” and others concurring they are “really good.”

The best part of these chocolate bars isn’t just their low price — people also love them because they are “high quality” and “ethically sourced,” which are two important qualities for a chocolate bar.

Aldi features multiple flavors of these sweet treats, including a unique dark chili bar as well as more traditional mint or a tasty orange and almond alternative.

4. Clancy’s potato chips

Clancy’s potato chips are another fan-favorite, including both the barbecue flavor and the onion ring flavor.

“They are the most addicting and flavorful chip I’ve ever had,” one Redditor said. “Lays can’t hold up against them at all. I discovered them like 6 months ago and I buy a bag once a week. Idk how I’m going to break the habit I love them so much.”

For some Redditor’s, however, the chip’s delicious taste and addicting properties are actually big downsides because the snack is just too good to put down. “These and Clancy’s onion ring flavor chips are banned in our house now because between us we will inhale the bag in one night,” the user chimed in. And many others mentioned having the same problems, with one person even commenting that the flavoring on the BBQ chips is so good they’d put in their coffee.

So, if you’re considering buying these, be warned.

Each of these items may be worth trying on your next visit to Aldi. Of course, many other people commented on the staples available at this store at good prices too, including milk, bread, and eggs. So, go for the boring pantry basics, too — but consider putting some of those chips in your basket.

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We’re firm believers in the Golden Rule, which is why editorial opinions are ours alone and have not been previously reviewed, approved, or endorsed by included advertisers.
The Ascent does not cover all offers on the market. Editorial content from The Ascent is separate from The Motley Fool editorial content and is created by a different analyst team.Discover Financial Services is an advertising partner of The Ascent, a Motley Fool company. Christy Bieber has no position in any of the stocks mentioned. The Motley Fool recommends Discover Financial Services. The Motley Fool has a disclosure policy.

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Suspicious Activity Reports are designed to catch criminals. Here’s how these reports work and why one might be filed. 

A lot is going on behind the scenes at your local bank. For example, did you know that banks take part in fighting crime? They’re charged with rooting out money launderers, terrorist groups, and other criminal enterprises. They do that by flagging suspicious activity and filing a Suspicious Activity Report (SAR).

What is a SAR?

SAR is a tool used to combat financial crime as directed under the Bank Secrecy Act, formally referred to as the Currency and Foreign Transactions Reporting Act of 1970. That act requires U.S. financial institutions to help government agencies detect and prevent money laundering.

Specifically, the act requires banks to keep records of cash deposits, purchases of negotiable instruments, and wire transfers. If a transaction exceeds $10,000, a Suspicious Activity Report must be filed within 30 calendar days of discovery.

The only exception is if the bank is still determining who carried out the transaction. In that case, it has 60 calendar days to make a report.

Where reports are sent

Criminal activity can typically be traced back to money. For example, terrorist groups need money to operate, and money launderers count on financial institutions to hide their criminal activity.

Once an incident is flagged as suspicious, financial institutions send their reports to the Financial Crimes Enforcement Network (FinCEN), part of the U.S. Financial Intelligence Unit and a division of the United States Treasury. FinCEN then begins its investigation.

What the report includes

Banks are required to provide the following information:

Who initiated the suspicious activity?When did the suspicious activity occur?Where did the suspicious activity occur?How did the activity occur? For example, was it a large cash deposit or wire transfer that appeared suspicious?

SAR triggers

According to FinCEN, these are some of the common activities that can trigger a Suspicious Activity Report:

Significant transactions made by those with no evidence of legitimate business activity.Transactions made between businesses that have no apparent connection to each other.Large transactions that serve no apparent economic purpose.Disproportionately large transactions for the type of business. Repetitive patterns of large wire transfers.Transactions involving bulk cash.A dormant account that suddenly becomes very active for a short period.Transactions designed to avoid detection. For example, regular deposits of $9,999.

What can happen?

If a SAR is filed based on your financial transactions, there’s little chance you’ll know about it. That’s because FinCEN regulations prohibit banks — whether online or brick and mortar — from informing customers. And if you’ve done nothing wrong, there’s a good chance you’ll never know there was an investigation because FinCEN will drop the matter.

Here’s the good news: As long as you’re not attempting to break the law, SAR will have little to no impact on your life.

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We’re firm believers in the Golden Rule, which is why editorial opinions are ours alone and have not been previously reviewed, approved, or endorsed by included advertisers.
The Ascent does not cover all offers on the market. Editorial content from The Ascent is separate from The Motley Fool editorial content and is created by a different analyst team.Discover Financial Services is an advertising partner of The Ascent, a Motley Fool company. Dana George has no position in any of the stocks mentioned. The Motley Fool recommends Discover Financial Services. The Motley Fool has a disclosure policy.

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Shop on Amazon a lot? You may want to be careful with returns. Read on to see why. 

As someone who shops on Amazon just about every week, I’ve made my fair share of returns in my day. Now to be fair, usually, when I return something, it’s because there’s an issue with the item in question.

Recently, I returned shoes that didn’t fit my son at all even though they were his size. Another time, I returned a gift I’d purchased for one of my daughter’s friends because the box was dented and damaged when it showed up at my doorstep.

If you’re not happy with a given Amazon purchase, or it just doesn’t meet your needs, then there’s no point in letting that charge sit on your credit card when you have the option to return it. But you may want to proceed with caution when making Amazon returns and limit the number of items you send back. If you go overboard, you could risk having your account yanked away.

Are you putting your Amazon account at risk?

Amazon’s official return policy reads as follows: “Amazon.com and most sellers on Amazon.com offer returns for items within 30 days of receipt of shipment.” Now, this doesn’t mean that every item you buy on Amazon is eligible to be returned, or to be returned for free. But generally, when you go to make a purchase, you’ll be told on the spot whether the item in question qualifies for free shipping and returns.

But what if you get into the habit of making too many returns? Can Amazon revoke your account?

The frustrating thing is that Amazon does not publish an official policy on this. But based on anecdotal evidence, it’s fair to say that if your returns become excessive, you could risk losing your account.

In 2018, the Wall Street Journal reported that some Amazon members had their accounts turned off for making too many returns. Worse yet, some claimed that happened to them without warning.

It’s all about moderation

It’s pretty fair to say that if you return 80% of the orders you make on Amazon, you’ll be putting your account at risk of getting flagged or potentially canceled. But Amazon expects customers to make their fair share of returns, and if you do so in moderation, you’re probably fine.

It’s hard to pinpoint exactly what that means because again, Amazon has no official policy on the matter. If I had to guess, though, I’d say I probably return one item for every 15 to 20 I purchase on Amazon. And so far, I’ve never had any repercussions. But in reality, you can probably get away with a much higher percentage of returns until it becomes a problem.

That said, making returns on Amazon can be a bit of a hassle, even if you don’t have to pay for them. You have to repack your items, find a dropoff point (like your local UPS store), and make certain you’re sending your items back within a preset window. Because of this, it pays to proceed with caution when ordering things from Amazon.

While I certainly make my share of Amazon returns, there have been times when I’ve specifically kept an item I didn’t want or like simply to not have to take 20 minutes out of my day for a $7 refund. I don’t know how many items I’ve kept due to not wanting to deal with a return, but it’s probably a good number of them. So for all I know, I could easily have a few extra hundred dollars in my bank account if it weren’t for my laziness. And you probably don’t want to fall into a similar trap.

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We’re firm believers in the Golden Rule, which is why editorial opinions are ours alone and have not been previously reviewed, approved, or endorsed by included advertisers.
The Ascent does not cover all offers on the market. Editorial content from The Ascent is separate from The Motley Fool editorial content and is created by a different analyst team.John Mackey, former CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool’s board of directors. Maurie Backman has positions in Amazon.com. The Motley Fool has positions in and recommends Amazon.com. The Motley Fool has a disclosure policy.

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Late retirement saver? Read on to uncover expert tips for stability after 40 and learn how to secure your retirement. 

A career shift, divorce, or big medical expense can dry up a savings account. That’s not so big a blow when you’re in your early 20s, or maybe your 30s. But eventually, one starts to wonder whether their retirement savings are too little, too late.

Perish the thought.

If you feel underequipped for retirement, you’re not alone. The typical 40-something American only has $35,000 saved in their 401(k), not nearly enough to fully fund retirement. Truth is, millions of savers are right there with you, wondering how to make up for lost time.

Americans can start saving for retirement at any point, and they should: The perks are enormous. Here’s what happens when you start saving for retirement after age 40.

You lose a big chunk of short-term income

At 40 years old, the typical retiree-in-training has about 25 years to save. But how much is enough? Suze Orman, a well-known finance guru, advises folks to save 10% of their income at bare minimum. But middle-aged savers might want to save closer to 20%, or possibly more.

There are at least three ways to calculate how much you need to save. The simplest is to estimate your final income (the income you anticipate making pre-retirement) and multiply that by 10.

For example: Say you anticipate making $80,000 pre-retirement. To maintain your current lifestyle, you’d want to have $800,000 saved up. You’d have to save $32,000 per year at 40 years old to hit $800,000 by retirement age…

…assuming you didn’t invest your retirement savings, therefore putting your money to work. Typically, you want to invest your savings. That way, it takes you less work and time to save more. Consider the magic of compound interest if you haven’t already.

Regardless, saving for retirement will cost you in the short term. But the perks make a solid retirement strategy worth considering.

You become more financially stable

There are a lot of “how to retire” articles floating around the internet, but many ignore the why. Why retire? What’s the point of losing all the income right now for uncertain gain later on? It boils down to stability. By the time you’re 65, you can anticipate the following:

Medical billsLoss of autonomyA change of pace

According to RegisteredNursing.org data, by the time you reach 65 years old, average healthcare costs are $11,300 per person, per year in the United States (that’s two to three times the average yearly bill in your 20s). Plus, health and life insurance grows more expensive. Retirement savings help you cover what insurance won’t.

I’ve seen my grandmother and three grandparents lean on family and medical services to get them through tough times. Everything from dementia to cancer can rob a person of the bodily functions younger folks take for granted. Retirement savings can cover nursing costs, hospital visits, and housing (even if that means paying a live-in family member’s rent).

With age comes the desire to slow down. Take long walks along the beach. Indulge in your hobbies. Visit grandkids. Retirement savings gives retirees the flexibility to work part time, take those much-needed vacations, and live at their own pace.

How to reach your retirement goal

Saving for retirement after 40 may be difficult, but the path is well-trod. Financial advisors like Suze Orman and Dave Ramsey suggest straightforward retirement strategies that pretty much all come down to earning interest on savings.

Orman recommends savers take advantage of any 401(k) match employers offer. Employer matching is as close to free money as things get. Barring a 401(k), Orman recommends investing in a Roth IRA, another tax-advantaged retirement account.

Typically, the closer you are to retirement, the fewer risks you want to take with your money. Should the stock market crash for 10 years, you may be forced to withdraw less than you put in. That means tweaking your investment strategy to ensure your money is low-risk high-reward. How you distribute your savings matters.

You can secure a comfortable retirement by doing two things:

Taking advantage of tax-advantaged retirement accounts.Adjusting your investment strategies as you get closer to retirement.

Don’t let a late start discourage you; a stable retirement is achievable with dedication and smart financial planning.

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We’re firm believers in the Golden Rule, which is why editorial opinions are ours alone and have not been previously reviewed, approved, or endorsed by included advertisers.
The Ascent does not cover all offers on the market. Editorial content from The Ascent is separate from The Motley Fool editorial content and is created by a different analyst team.Cole Tretheway has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.

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Life insurance is a good thing to have, but you don’t want to go overboard. Read on to find out how much is too much. 

If you’re wondering whether life insurance is something you need, all you really have to do is ask yourself if there are people in your life who might get hurt financially in the event of your passing. If the answer is yes, then buying life insurance can be the best way to protect the people you care about.

But one thing you don’t want to do is buy too much life insurance. Even though there are plenty of affordable options out there, it’s silly to strain your budget and take on higher premium costs than necessary. After all, if you can secure adequate coverage at a lower price point, why not take the money you’re saving and use it for other purposes — like actual savings?

Meanwhile, here are a few signs that you may be looking at buying more life insurance than you actually need.

1. You’re replacing more than 10 to 20 times your salary

As a general rule, when buying life insurance, it’s a good idea to aim for a benefit that covers 10 times your salary. And some experts might advise you to aim higher so you’re replacing 20 times your salary. (Suze Orman, for example, thinks you should have at least 20 years of income replaced.)

But you generally do not need 30 or 40 times your salary in life insurance form. So if you earn $50,000 a year, a policy with a $500,000 to $1 million benefit will probably suffice. A $2 million policy is probably overkill.

2. You’re buying a longer term than you really need

If you’re buying term life insurance, which covers you for a preset period of time, you can choose how many years of coverage you want. In many cases, a 20-year term will suffice in protecting your family. You may even want more coverage — say, 25 or 30 years’ worth. Some life insurance companies will write you a longer policy than 30 years. But you probably don’t need one.

Say your kids are five and two years old. If you buy a 30-year term life insurance policy, they’ll be protected through ages 35 and 32. But do you really need to protect them into their 40s? At that point, they’re likely to have stable jobs and careers, so that longer term may not be necessary.

3. You’re buying whole life insurance when term life will suffice

Whole life insurance covers you on a permanent basis, whereas term life insurance could run out on you. (If it does, that’s a good thing — it means you’ve lived.) But the cost of whole life insurance can be far greater than the cost of a term life policy. So for the most part, you’re better off skipping whole life insurance unless you enjoy the idea of handing over heaps of money to a life insurance company.

To illustrate the difference in cost between whole life insurance and term life, Forbes Advisor says that for a healthy 30-year-old non-smoking male, whole life insurance with a $500,000 benefit would cost, on average, about 5.8 times more than a 40-year term life policy with a $500,000 benefit. For a 30-year-old female, the difference in cost between these two policies would be 6.7 times more for whole life coverage.

Forbes acknowledges that this isn’t the best cost comparison because whole life insurance and term life insurance are really two very different products. The point, however, is that there’s a huge difference in cost, and that’s something you must consider.

Buying life insurance is a smart financial move — but buying too much of it isn’t. Run your numbers and consider your coverage needs carefully before locking in expensive premiums that eat up an uncomfortably large chunk of your income.

Our picks for best life insurance companies

Life insurance is essential if you have people depending on you. We’ve combed through the options and developed a best-in-class list for life insurance coverage. This guide will help you find the best life insurance companies and the right type of policy for your needs. Read our free review today.

We’re firm believers in the Golden Rule, which is why editorial opinions are ours alone and have not been previously reviewed, approved, or endorsed by included advertisers.
The Ascent does not cover all offers on the market. Editorial content from The Ascent is separate from The Motley Fool editorial content and is created by a different analyst team.The Motley Fool has a disclosure policy.

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